Refer to Figure 7.1. If Angus chooses to earn the most money and Dudley calls the police, Dudley will receive a daily payoff of
A) $350.
B) $550.
C) $700.
D) none of the above
A
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If the economy in the graph shown were at point B, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase government spending.
B. increase income tax.
C. decrease tax credits.
D. All of these would move the economy to its potential GDP from point B.
Sticky prices are a direct result of the kinked demand curve
a. True b. False Indicate whether the statement is true or false
The change in the quantity of labor demanded resulting from a change in the relative cost of labor is known as the ________ effect.
A. input-substitution B. price elasticity C. output D. derived demand
The two sectors of the economy in the simple circular flow model are
A. households and businesses. B. foreign markets and domestic markets. C. the private sector and the public sector. D. the employed and the unemployed.